Between reforming the IPC and destroying the INE

John MuellerCONTINUE
Updated: 06/30/2022 03:18h

In the 1990s, Alan Greenspan, chairman of the US Federal Reserve, launched a campaign against the way the Consumer Price Index (CPI) was calculated in his country. So, Greenspan was an undisputed eminence among central bankers. He dedicated several speeches to the subject of prices, in the most influential professional forums, complaining that the way of calculating the CPI overestimated inflation. A debate then arose about the so-called 'hedonic prices'. According to the central banker, the CPI did not take into account variations in product quality. The clearest example was that of computers: a latest model was worth almost the same as another ten years earlier, but the features were infinitely superior in terms of capacity and speed.

Enjoy unlimited access to the best journalismSubscribe now for only €1/month for 3 months subscribe

If you are already subscribed, log in

More information

Related OpinionsTopics

Source link